‘Gangnam Style’ Tells Economic Truth of Our Day

By William Pesek -
Oct 15, 2012

It isn’t every day that the finance
minister of a major nation mentions a rap star when talking up
his economy. But then South Korea (KOSPI) isn’t your average economy and
Psy isn’t your usual entertainer.

Bahk Jae Wan did that in an Oct. 9 interview. South Korea’s
top economic official cited the singer of the global smash hit
“Gangnam Style” as an example of the kind of creativity and
international competitiveness the country needs. It wasn’t a
laugh line. It was a plea for South Koreans to let their hair
down and dream a bit.

It is something I had been wondering as “Gangnam Style”
racks up hundreds of millions of hits on YouTube; earns Psy gigs
on “The Ellen DeGeneres Show” and NBC’s “Today Show”; works
its way into North Korea’s propaganda; and single-handedly
strengthens South Korea’s global brand. I’m a fan. But face it,
it isn’t a particularly brilliant song. Nor would many say Psy
(whose name is Park Jae-Sang) is a world-class singer, dancer or
stage presence. So how did a man who is relatively ancient by
South Korea’s pubescent pop standards do what no one had done
before -- go global?

The reason has more to do with economics than meets the eye
and speaks volumes about where South Korea finds itself in 2012.

1 Percent

Before his song went global, it swept through South Korea’s
50 million-strong population. Sure, the tune is catchy and his
crazed horse-riding dance is a show-stopper. But its real appeal
is the social satire that lies not very far below the surface.
Gangnam is a ritzy part of Seoul that South Koreans see as an
amalgam of Beverly Hills, Manhattan’s Upper East Side and
Tokyo’s Shibuya district. It is South Korea’s 1 percent enclave.

Many young hipsters crave living the Gangnam style someday,
much as Americans watching “Gossip Girl” think: “I want that
life.” Psy’s song and ubiquitous video parody the tony
neighborhood and poke fun at the crass materialism that has
consumed a country that just 15 years ago was beset by economic
turmoil. Back then, amid Asia’s 1997 crisis, households donated
gold to shore up the national treasury. Now, the well-to-do
flock to Gangnam to buy gold and other conspicuous signs of
wealth. Or just to wear black and sip overpriced coffee.

By both celebrating this phenomenon and mocking it, Psy
caught the bipolar nature of Korea’s economy.

Intrepid Success

One face of today’s South Korea is intrepid success.
Remember that just four years ago, hedge funds were pegging
Asia’s fourth-biggest economy as the next Iceland. Far from
going bust like that island nation, Korea sidestepped Wall
Street’s meltdown. Its 3.1 percent jobless rate is less than
half the U.S.’s and a third of France’s.

Yet South Koreans are having an identity crisis. They are
proud of the Samsung (005930) sign towering over Times Square in New York
and the Hyundai cars filling roads from Miami to Sydney. Korea
has gotten as far as it can, though, with the export-led model
that powered its postwar boom and restored living standards
after 1997.

And then there are the costs, both real and intangible.
South Korean workers put in some of the longest hours in the
world. Kids experience truncated childhoods as cram schools and
after-class tutoring keep them off the playground. Anxiety
pervades college students jockeying for coveted jobs at the
family-owned conglomerates that dominate the economy. Household
debt, meanwhile, has surged as more and more South Koreans
strive for the Gangnam lifestyle.

Subversive Message

All this explains why Psy struck such a chord. Koreans are
coming to the realization that gross domestic product gains
don’t necessarily result in commensurate gross domestic
happiness. Hence Psy’s subversive message about class and wealth
being false gods. It also gets at why the finance minister would
opine about a rap song.

“Our service sector is a weak point,” Bahk said. “Unlike
competitive exporters with well-diversified goods and markets,
the service sector is too much closed. We see gradual progress
in some areas, but the success stories such as singer Psy are
still quite an exception. They should open up the domestic
market and compete with foreign rivals to grow up.”

In other words, innovate to make the economy more
entrepreneurial and globally nimble. Here, the nation’s cultural
export industry, dubbed “Korean Wave,” is an apt metaphor.

It is a cookie-cutter business -- long legs, robotic dance
moves and years of training and grooming to produce “K-pop”
stars who tend to be as plastic as they are forgettable. Psy, by
contrast, is the outlier who made it through hard work, humor
and his own brand of talent. He is 34, portly and, by his own
admission, not a looker. He writes his own songs and traveled a
long and lonely journey that paid off in the end.

South Korea’s economy should be a lot more like that. It
has what it takes to go up against the best talent the world has
to offer. It just needs to find its own groove. The government
may want to summon Psy in for some pointers.

(William Pesek is a Bloomberg View columnist. The opinions
expressed are his own.)